Lean Manufacturing

Dr Christian Hicks

CH/1 Dr. Christian Hicks

Newcastle upon Tyne and the North East of England

CH/2 Dr. Christian Hicks

Productivity (GVA per job) vs. Participation (jobs per population of working age) - 2003
115

Productivity (GVA per Job - Index UK=100)

East 110 S East

105

100 E Mids 95 Y &H 90 North East Wales N Ireland 85 65 70 75 NW

Regional policy London seeks to increase England productivity and UK Scot participation
S West W Mids

80

85

90

95

100

Participation (Em ploym ent rate)

CH/3 Dr. Christian Hicks

NE sectoral performance, sector growth and regional significance

Sectoral Performance NE 2002 (GB = 100%) Agriculture, hunting, forestry & fishing Mining and quarrying of energy producing materials + Other mining and quarrying Manufacturing Electricity, gas and water supply Construction Wholesale and retail trade (including motor trade) Hotels and restaurants Transport, storage and communication Financial intermediation Real estate, renting and business activities Public administration and defence4 Education Health and social work Other services
Source: ONS & ABI

GVA Growth GB 1992-2002

Regional LQ NE 2002

Lower than average manufacturing sector performance

UK manufacturing has relatively low GVA growth

NE has high reliance on manufacturing

91% 99% 97% 87% 83% 86% 87% 89% 88% 84% 76% 101% 101% 78%

-6% -26% 26% 39% 58% 102% 126% 77% 107% 161% 46% 124% 110% 150%

59% 137% 130% 142% 112% 88% 93% 89% 53% 69% 121% 132% 134% 89%

Increasing manufacturing productivity is a regional priority

CH/4 Dr. Christian Hicks

North East Economy

Previously a strong reliance on traditional industries: Coal mining Ship building Power plant (steam turbines, switchgear etc.) Defence (tank factory) All these sectors have been in long term decline.

CH/5 Dr. Christian Hicks

Nissan Motors UK (Sunderland)

The Bluebird was the first UK Nissan car, which was produced in July 1986. At the end of 2004, the plant produced 400,00 cars per year.

CH/6 Dr. Christian Hicks

 Dr. Christian Hicks

Henry Fords production line was developed in 1913. The CH/7 idea was inspired by a trip to an abattoir.

1909 Model T Ford Black! - Standardised Any colour you like provided it is
Any colour you like provided it is black! Model T Ford 1909.

Vertically integrated even farmed sheep! CH/8

Dr. Christian Hicks

CH/9 Dr. Christian Hicks

Scientific Management
Whenever a workman proposes an improvement, it should be the policy of the management to make a careful analysis of the new method, and if necessary conduct a series of experiments to determine accurately the relative merit of the new suggestion and of the old standard. And whenever the new method is found to be markedly superior to the old, it should be adopted as the standard for the whole establishment, F.W.Taylor, Principles of Scientific Management, 1911.
Standardisation and best practice deployment

CH/10 Dr. Christian Hicks

Ford Mass Production System

Minimised waste, maximised value Workers paid $5 per day, more than double the average Model T cars were cheap for customers, by 1918, half of all American cars were Model Ts. By 1927, 15,007,034 had been produced, a record which stood for the following 45 years.

CH/11 Dr. Christian Hicks

Toyota Production System

After World War II, Toyota was almost bankrupt. Post war demand was low and minimising the cost per unit through economies of scale was inappropriate. This led to the development of demand-led pull systems. The Japanese could not afford the expensive mass production facilities of the type used in the USA so they instead focused on reducing waste and low cost automation. Likewise, Toyota could not afford to maintain high inventory levels.
CH/12 Dr. Christian Hicks

Founders of the Toyota Production System (TPS)

Taiichi Ohno (1912 1990)

Dr. Christian Hicks

Shigeo Shingo 1909 1990

CH/13

Just-in-Time Manufacturing
In the broad sense, an approach to achieving excellence in a manufacturing company based upon the continuing elimination of waste (waste being considered as those things which do not add value to the product). In the narrow sense, JIT refers to the movement of material at the necessary time. The implication is that each operation is closely synchronised with subsequent ones to make that possible APICS Dictionary 1987.
JIT became part of Lean Manufacturing after the publication of Womacks Machine that Changed the World in 1991

CH/14 Dr. Christian Hicks

Faurecia, Washingtong, Tyne & Wear

CH/15 Dr. Christian Hicks Lean Manufacturing is a way of thinking

Lean Manufacturing goals

Waller, D.L.,,1999,Operations Management: A Supply Chain Approach, (Thompson, London)

CH/16 Dr. Christian Hicks

Lean Manufacturing
Arose in Toyota Japan as the Toyota Production System Replacing complexity with simplicity A philosophy, a way of thinking A process of continuous improvement Emphasis on minimising inventory Focuses on eliminating waste, that is anything that adds cost without adding value Often a pragmatic choice of techniques is used
CH/17 Dr. Christian Hicks

Toyota Production System

Technologies and practices can be copied. Most of the philosophies and techniques are widely disseminated. However, Toyota remains at the forefront, primarily because it is a learning organisation. Problem solving methods are applied routinely and are completely ingrained. The employees are continually engaged in Kaizen (continuous improvement). Many aspects of TPS are based upon embedded tacit knowledge. CH/18
Dr. Christian Hicks

TPS: How the work is done

Every activity is completely specified, then applied routinely and repetitively. Because: All variation from best practice leads to poorer quality, lower productivity and higher costs. It hinders learning and improvement because variations hide the link between the process and the results. It is necessary to make sure that the person performing the activity can perform it correctly and that the correct results are achieved.
CH/19 Dr. Christian Hicks

7 Forms of Waste Muda

Overproduction most serious waste because it discourages the smooth flow of material and inhibits productivity and quality. Waiting wastes time and money. Transport Inappropriate processing e.g. use of complex processes rather than simple ones. Over complexity encourages over production to try and recover the investment in over complex machines. Unnecessary inventory increases lead-times and costs. Unnecessary motion relates to poor ergonomics where operators have to stretch, strain etc. This makes them tired. Defects physical waste. Regarded as an opportunity to improve. Defects are caused by poor processes. CH/20 Dr. Christian Hicks

Lean Manufacturing
Philosophy Techniques usually applied very pragmatically.

CH/21 Dr. Christian Hicks

Lean Techniques
Manufacturing techniques Production and material control Inter-company Lean Organisation for change

CH/22 Dr. Christian Hicks

Manufacturing Techniques
Gemba Kanri Cellular manufacturing Set-up time reduction Smallest machine concept Fool proofing (Pokayoke) Pull scheduling Line stopping (Jikoda) I,U,W shaped material flow Housekeeping
CH/23 Dr. Christian Hicks

Genba Kanri Workplace Management

System by which standards for running the day-to-day business are established, maintained controlled and improved . Includes a number of methods: 5Ss Standard operations Skill control, including the assessment of individuals capabilities, the identification of job requirements, the development of a comparison matrix and the identification of training needs; Kaizen is a cost cutting approach that continuously makes small improvements to processes (Wikipedia, 2005); Visual management, the provision of notice boards for control information, stock, materials movement, health and safety and work methods. CH/24 Dr. Christian Hicks

5Ss

Waller, D.L.,,1999,Operations Management: A Supply Chain Approach, (Thompson, London)

CH/25 Dr. Christian Hicks

Functional layout

Cellular layout

Askin G.G & Standridge C.R. (1993) Modelling and Analysis of Manufacturing Systems, John Wiley ISBN 0-471-57369-8

Functional layout

CH/27 Dr. Christian Hicks

Siemens Power Generation Systems

CH/28

Manufacturing cells Dr. Christian Hicks

Siemens Power Generation Systems

A single machine acting as a cell

CH/29 Multifunction double gantry mill Dr. Christian Hicks

Siemens Power Generation Systems

Group Technology / Cellular Manufacturing

Improved material flow Reduced queuing time Reduced inventory Improved use of space Improved team work Reduced waste Increased flexibility

CH/30 Dr. Christian Hicks

Set-up Time Reduction

Single minute exchange of dies (SMED) - all changeovers < 10 mins. 1. Separate internal set-up from external set-up. Internal set-up must have machine turned off. 2. Convert as many tasks as possible from being internal to external 3. Eliminate adjustment processes within set-up 4. Abolish set-up where feasible Shingo, S. (1985),A Revolution in Manufacturing: the SMED System, The Productivity Press, USA.
CH/31 Dr. Christian Hicks

Set-up Analysis
Video whole set-up operation. Use cameras time and date functions Ask operators to describe tasks. As group to share opinions about the operation.

CH/32 Dr. Christian Hicks

Three Stages of SMED

1. Separating internal and external set-up doing obvious things like preparation and transport while the machine is running can save 30-50%. 2. Converting internal set-up to external set-up 3. Streamlining all aspects of the set-up operation

CH/33 Dr. Christian Hicks

Single Minute Exchange of Dies (SMED)

Increases flexibility Makes it easier to reduce batch size Reduces waste

Waller, D.L., 2003,Operations Management: a Supply Chain Perspective 2nd Edition, Thompson, London

CH/34

Dr. Christian Hicks

Overall Equipment Effectiveness

Open time total time an operator available to work on a machine e.g. 8 hours per day Operator pause coffee breaks, chatting, toilet breaks etc. Machine breakdowns Unplanned interruptions e.g. having to make modifications Machine set-up Low performance throughput less than design. Scrap products
CH/35 Dr. Christian Hicks

Overall Equipment Effectiveness

Waller, D.L.,,1999,Operations Management: A Supply Chain Approach, (Thompson, London)

CH/36 Dr. Christian Hicks

Small Machine Concept

Slack, N. Chambers, S. and Johnson, R, 2004,Operations Management, 4th Edition, Prentice Hall

Using several small machines rather than one large one allows simultaneous processing, is more robust and is more flexible CH/37
Dr. Christian Hicks

Lean Material Control

Pull scheduling Line balancing Schedule balance and smoothing (Heijunka) Under capacity scheduling Visible control Point of use delivery Small lot & batch sizes
CH/38 Dr. Christian Hicks

Waller, D.L., 2003,Operations Management: a Supply Chain Perspective 2nd Edition, Thompson, London

CH/39 Dr. Christian Hicks

Waller, D.L., 2003,Operations Management: a Supply Chain Perspective 2nd Edition, Thompson, London

Push system

Workers operate at their own pace trying to maximise output

CH/40

Dr. Christian Hicks

Push system

Lead time

Waller, D.L., 2003,Operations Management: a Supply Chain Perspective 2 nd Edition, Thompson, London

CH/41 Dr. Christian Hicks

Pull system synchronised with demand. Lot size = 1

Waller, D.L., 2003,Operations Management: a Supply Chain Perspective 2nd Edition, Thompson, London

CH/42

Dr. Christian Hicks

Pull system

Lead time
Waller, D.L., 2003,Operations Management: a Supply Chain Perspective 2nd Edition, Thompson, London

CH/43 Dr. Christian Hicks

Production after 1 hour: WP1: 180 WP2&3 combined: 180 Increase = 36 per hour
Dr. Christian Hicks

Flexible workers in Lean combine WP2 & 3

Waller, D.L., 2003,Operations Management: a Supply Chain Perspective 2nd Edition, Thompson, London

CH/44

Pull Systems
Work centres only authorised to produce when it has been signalled that there is a need from a user / downstream department No resources kept busy just to increase utlilisation Requires: Small lot-sizes Low inventory Fast throughput Guaranteed quality
CH/45 Dr. Christian Hicks

Pull Systems
Implementations vary Visual / audio signal Chalk square One / two card Kanban

CH/46 Dr. Christian Hicks

Lean Purchasing
Lean purchasing requires predictable (usually synchronised) demand Single sourcing Supplier quality certification Point of use delivery Family of parts sourcing Frequent deliveries of small quantities Propagate Lean down supply chain, suppliers need flexibility Suppliers part of the process vs. adversarial relationships
CH/47 Dr. Christian Hicks

Lean Purchasing
Controls and reduces inventory Reduces space Reduces material handling Reduces waste Reduces obsolescence

CH/48 Dr. Christian Hicks

CH/49 Notice placed prominently at the door at Faurecia Dr. Christian Hicks

More detail
Dr. Christian Hicks

CH/50

Organisation for Change

Multi-skilled team working Quality Circles, Total Quality Management Philosophy of joint commitment Visible performance measurement Statistical process control (SPC) Team targets / performance measurement Enforced problem solving Continuous improvement
CH/51 Dr. Christian Hicks

Total Quality Management (TQM)

Focus on the customer and their requirements Right first time Competitive benchmarking Minimisation of cost of quality Prevention costs Appraisal costs Internal / external failure costs Cost of exceeding customer requirements Founded on the principle that people want to own problems
CH/52 Dr. Christian Hicks

The Deming Cycle

Hill, T. 2005, Operations Management, 2nd Edition, Palgrave Macmillan

CH/53 Dr. Christian Hicks

Cause/effect (fishbone) diagram

Hill, T. 2005, Operations Management, 2nd Edition, Palgrave Macmillan

CH/54

Dr. Christian Hicks

Lean Flexibility
Set-up time reduction Small transfer batch sizes Small lot sizes Under capacity scheduling Often labour is the variable resource Smallest machine concept

CH/55 Dr. Christian Hicks

Reducing Uncertainty
Total Preventative Maintenance (TPM) / Total Productive Maintenance 100% quality Quality is part of the process - it cant be inspected in Stable and uniform schedules Supplier quality certification

CH/56 Dr. Christian Hicks

Total Preventative Maintenance (TPM)

Strategy to prevent equipment and facility downtime Planned schedule of maintenance checks Routine maintenance performed by the operator Maintenance departments train workers, perform maintenance audits and undertake more complicated work.

CH/57 Dr. Christian Hicks

The problem with inventory

productivity problems WIP Defective materials Scrap Downtime Rework

Reduce the level of inventory (water) to reveal the operations problems

WIP Defective materials

Slack, N. Chambers, S. and Johnson, R, 2004,Operations Management, 4th Edition, Prentice Hall

productivity problems

Scrap Downtime

Rework

CH/58 Dr. Christian Hicks

Operational prerequisites
Level schedules Frozen schedules Fixed routings Frequent set ups Small and fixed order quantities High quality conformance Low process breakdowns Labour utilisation not the key factor Employee involvement
CH/59 Dr. Christian Hicks

Lean in the North East of England

Regional Development Agency the North East Productivity Alliance to disseminate Lean expertise. The initiative involves about 150 companies in the region. A pilot of 16 companies resulted in total savings of 4.36m. Several companies would have otherwise have gone out of business. There were dramatic improvements in efficiency, delivery performance and productivity.
CH/60 Dr. Christian Hicks